THIS OPINION
HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN
ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.
THE STATE OF SOUTH CAROLINA
In The Court of Appeals
Case No.: 2007-ALJ-17-0299
Alltel Communications, Inc., Respondent,
v.
South Carolina Department of Revenue, Appellant.
Case No.:
2007-ALJ-17-0300
Alltel Mobile Communications of the Carolinas, Inc., Respondent,
Case No.: 2007-ALJ-17-0301
New York Newco Subsidiary, Inc., Respondent,
Case No.: 2007-ALJ-17-0302
Telespectrum, Inc., Respondent,
Case No.: 2007-ALJ-17-0303
360 Communications Co. of SC No. 1, Respondent,
South Carolina
Department of Revenue, Appellant.
Case No.: 2007-ALJ-17-0304
360 Communications Co. of SC No. 2, Respondent,
Appeal From Richland County
Marvin F. Kittrell, Administrative Law
Court Judge
Unpublished Opinion No. 2010-UP-232
Heard February 9, 2010 Filed April 7,
2010
REVERSED AND REMANDED
Harry A. Hancock, of Columbia, for Appellant.
John M.S. Hoefer and Tracey C. Green, of Columbia, for Respondents.
PER CURIAM: In this
appeal of an order granting summary judgment to Respondents, the South Carolina
Department of Revenue (Department) challenges the Administrative Law Court's
(ALC's) determination that Respondents were not telephone companies and thus
did not owe any license fees pursuant to section 12-20-100 of the South
Carolina Code (2000). The Department also contends that the ALC failed to give
proper consideration to other issues raised by the parties in their summary
judgment motions. We reverse and remand.
FACTUAL/PROCEDURAL BACKGROUND
Respondents are Alltel
Communications, Inc., Alltel Mobile Communications of the Carolinas, Inc., New
York Newco Subsidiary, Inc., Telespectrum, Inc., 360 Communications Co. of SC
No. 1, and 360 Communications Co. of SC No. 2.[1]
During the tax years ending December 31, 1999 through December 31, 2003 (Tax
Years), Respondents were either directly engaged, or owned interests in
partnerships that were engaged, in the business of providing wireless voice and
data communications service via radio within South Carolina.
In 2004, the Department
initiated an audit of Respondents. At the conclusion of the audit, the
Department notified Respondents that it had determined that a deficiency
existed in the license fees paid by Respondents for the Tax Years. The
Department proposed to assess Respondents $4,709,671 in additional license
fees, interest, and penalties.
The basis for the proposed
assessment was the Department's determination that Respondents had erroneously
used section 12-20-50 of the South Carolina Code (2000) to calculate their
license fees. The Department concluded that each Respondent was a
"telephone company" and thus was required to pay license fees in
accordance with section 12-20-100, rather than section 12-20-50.
Respondents each timely filed
with the Department a protest of the proposed assessment. The Department issued
a final agency determination denying the protests on May 30, 2007. Thereafter,
each Respondent timely filed a request for a contested case hearing with the
ALC.
The ALC consolidated the six
cases. After filing joint stipulations of facts, the parties filed
cross-motions for summary judgment. In their summary judgment motion,
Respondents contended that section 12-20-100 did not apply to them because they
were not telephone companies. Alternatively, Respondents argued that, if they
were telephone companies, the Department did not properly calculate the license
fee owed by Respondents under section 12-20-100. Specifically, Respondents
claimed that the Department erred by determining that they derived gross
receipts from "services rendered from regulated business" as
contemplated by section 12-20-100(A)(2)(a). Additionally, Respondents
contended that section 12-20-100 did not apply to partnerships and that the
Department therefore erred by including in its assessment the assets and gross
receipts attributable to Respondents' partnership interests. Furthermore,
Respondents claimed that the Department should not have imposed a
"substantial understatement" penalty under section 12-54-155 of the
South Carolina Code (2000) because Respondents' position with respect to their
liability under section 12-20-100 was supported by substantial authority.
Lastly, Respondents argued that the Department made certain calculation errors
with respect to the amounts owed by Alltel Mobile Communications of the
Carolinas, Inc. and New York Newco Subsidiary, Inc.
On April 22, 2008, the ALC
granted Respondents' motion for summary judgment and denied the Department's
motion. The ALC determined that Respondents were not telephone companies for
the purposes of section 12-20-100 and thus were not required to pay license
fees under that statute. This appeal followed.
ISSUES ON APPEAL
| 1. |
Did the
ALC err by granting summary judgment to Respondents?
|
| 2. |
Did the ALC fail to give proper
consideration to other issues raised by the parties in their summary judgment
motions? |
STANDARD OF REVIEW
When reviewing
the grant of summary judgment, an appellate court applies the same standard that
governed the trial court. Wogan v. Kunze, 379 S.C. 581, 585, 666 S.E.2d
901, 903 (2008). As in civil matters, summary judgment is appropriate in an
administrative matter when there is no genuine issue of material fact and the
moving party is entitled to a judgment as a matter of law. See Rule
56(c), SCRCP (setting forth the standard for granting summary judgment in civil
matters); South Carolina Administrative Practice and Procedure 175
(Randolph R. Lowell ed., 2d ed. 2008) (stating that the standard for granting
summary judgment in an administrative matter is the same as in a civil matter).
Because summary
judgment is a drastic remedy, it should be cautiously invoked to ensure that a
litigant is not improperly deprived of a trial on disputed factual issues. Mulherin-Howell
v. Cobb, 362 S.C. 588, 597, 608 S.E.2d 587, 592 (Ct. App. 2005). Where further inquiry into the facts of
the case is desirable to clarify the application of the law, summary judgment
is not appropriate. Brockbank v. Best Capital Corp., 341 S.C. 372, 378,
534 S.E.2d 688, 692 (2000). Moreover, "[s]ummary judgment should not be
granted even when there is no dispute as to evidentiary facts if there is
dispute as to the conclusion to be drawn from those facts." Id.
LAW/ANALYSIS
I. Section 12-20-100
The Department
argues that the ALC erred by granting summary judgment to Respondents on the
ground that Respondents did not constitute telephone companies for the purposes
of section 12-20-100. Because we conclude that further inquiry into the facts
is necessary to resolve this issue, we agree.
Section
12-20-100(A) provides in pertinent part:
In the
place of the license fee imposed by Section 12-20-50, every express company,
street railway company, navigation company, waterworks company, power company,
electric cooperative, light company, gas company, telegraph company, and telephone
company shall file an annual report with the department and pay a license
fee as follows:
(1) one
dollar for each thousand dollars, or fraction of a thousand dollars, of fair
market value of property owned and used within this State in the conduct of
business as determined by the department for property tax purposes for the
preceding taxable year; and
(2)(a) three dollars for each thousand dollars, or fraction of a thousand dollars,
of gross receipts derived from services rendered from regulated business within
this State during the preceding taxable year, except that with regard to
electric cooperatives, only distribution electric cooperatives are subject to
the gross receipts portion of the license fee under this subitem (2)(a).
S.C. Code Ann. § 12-20-100(A)
(2000) (emphasis added).[2]
The term "telephone
company" is not defined in section 12-20-100 or in the definitional
section of chapter 20 of title 12.[3]
"Where a word is not defined in a statute, our appellate courts have
looked to the usual dictionary meaning to supply its meaning." Berkeley
County Sch. Dist. v. S.C. Dep't of Revenue, 383 S.C. 334, 345, 679 S.E.2d 913,
919 (2009) (quoting Lee v. Thermal Eng'g Corp., 352 S.C. 81, 91-92, 572
S.E.2d 298, 303 (Ct. App. 2002)). In addition to utilizing dictionaries, our courts
have reviewed other state statutes, as well as state appellate decisions, to
ascertain the meaning of an undefined statutory term. See Sonoco
Products Co. v. S.C. Dep't of Revenue, 378 S.C. 385, 662 S.E.2d 599 (2008)
(where the term "contiguous" was not defined in the applicable statute,
the court reviewed dictionaries, state statutes, and state appellate decisions that
dealt with the concept of contiguity in order to glean the appropriate
definition).
Here, the ALC concluded that
"based on the plain language of the statute," none of the Respondents
constituted a telephone company for the purposes of section 12-20-100 because
"the services they provide relate to the provision of wireless
communications via radio, not communications via telephone." The ALC's
decision does not cite a dictionary definition of either "telephone"
or "telephone company," nor does it cite a South Carolina appellate court
decision construing those terms. Rather, it appears that, in reaching its
result, the ALC relied primarily upon the parties' stipulation that
"[t]elephones and telephone companies transmit intelligence over a vast
network of wires located in public rights of way and in easements over
private property." (emphasis added).[4]
At first blush, the parties'
stipulation seems to provide significant support for the ALC's conclusion.
However, upon further reflection, we conclude that the stipulation is not dispositive
of this case. The question
of what the legislature intended for the term "telephone company" to
mean for the purposes of section 12-20-100 is a question of law. See Charleston
County Parks & Recreation Comm'n v. Somers, 319 S.C. 65, 67, 459 S.E.2d
841, 843 (1995) ("The determination of legislative intent is a matter of
law."); Bryant v. State, 384 S.C. 525, 529, 683 S.E.2d 280, 282
(2009) ("As this case involves statutory interpretation, we are presented
with a question of law."); Catawba Indian Tribe of S.C. v. State,
372 S.C. 519, 524, 642 S.E.2d 751, 753 (2007) ("The issue of
interpretation of a statute is a question of law for the court."). Importantly, courts are generally not bound by
stipulations regarding questions of law. See Greenville
County Fair Ass'n v. Christenberry, 198 S.C. 338, 345, 17 S.E.2d 857, 859
(1941) (holding that a "stipulation as to the law" is generally not
binding upon the courts); McDuffie v. McDuffie, 308 S.C. 401, 409-10,
418 S.E.2d 331, 336 (Ct. App. 1992) (holding that stipulations involving
questions of law are not binding on the court); 83 C.J.S. Stipulations §
30 (2000) (stating that courts are not bound by stipulations regarding
questions of law, such as the intent of a lawmaking body or the construction of
a statute).
Moreover, we note
that stipulations must be "construed like a contract, to effect the intent
of the parties." Webster v. Holly Hill Lumber Co., 268 S.C. 416,
421, 234 S.E.2d 232, 234 (1977). Here, we do not believe that it was the
Department's intent to, in essence, forfeit its entire case by stipulation. Regardless,
we conclude that the parties were not competent to stipulate as to the intent
of the legislature regarding its use of the term "telephone company"
in Section 12-20-100.
Because we find
that the parties' stipulation as to the meaning of the term "telephone
company" was not dispositive of this case, we must look to the remaining
portions of the record to determine whether Respondents fell within the terms
of section 12-20-100. Based upon our careful review of the record, we conclude
that additional development of the facts is necessary to clarify the
application of section 12-20-100 as to Respondents. See Brockbank,
341 S.C. at 378, 534 S.E.2d at 692 (holding that summary judgment is not
appropriate when additional development of the facts is desirable to clarify
the application of the law). For instance, further inquiry into the nature of
the services provided by Respondents is essential. Although the parties have made
some stipulations regarding Respondents' services, we do not believe that those
stipulations are sufficient to determine whether Respondents constitute
telephone companies for the purposes of section 12-20-100.
We find support
for our conclusion in Shea v. State Dep't of Mental Retardation.[5] In that case, we held that the trial
court erred by granting summary judgment on the issue of whether the Department
of Mental Retardation's Midlands Center constituted a "hospital or other
facility" within the meaning of section 44-7-50 of the South Carolina Code
(1976). We concluded that further inquiry into the facts was warranted, specifically
noting that the record was "not clear" as to the nature of the
Midlands Center. Shea, 279 S.C. at 611, 310 S.E.2d at 823. In reaching
our decision, we stated:
The question of the construction of this statute as applied to a
mental retardation facility is an important question of novel impression. If
the statute's application is not absolutely clear as a matter of law, this
question should not be decided without fully developing the facts by means of
trial.
Id. at 611, 310 S.E.2d at 822.
Here, the construction of section 12-20-100 as
applied to wireless communications service providers is an important question
of novel impression. No appellate court in this State has construed the term
"telephone company" for the purposes of section 12-20-100. Moreover,
the application of section 12-20-100 is not "absolutely clear." As
noted above, the term "telephone company" is not defined in section
12-20-100 or in the applicable
definitional section. Additionally,
an examination of other South Carolina statutes and regulations reveals that while
wireless communications service providers are treated differently from landline
telephone companies for regulatory purposes,[6] their services are treated the same with respect to the sales and use tax.[7] Furthermore, courts from other jurisdictions
that have addressed issues similar to the one presented here have not reached
consistent results. Compare Bell Atl. Mobile of Mass. Corp., Ltd. v.
Comm'r of Revenue, 884 N.E.2d 978 (Mass. 2008) (holding that a cell phone
service provider was not a "telephone company" for the purposes of a
statute providing for the central valuation of the "machinery, poles,
wires and underground conduits, wires and pipes of all telephone and telegraph
companies"), and In re Appeal of Topeka SMSA Ltd. P'ship, 917 P.2d 827 (Kan. 1996) (holding that companies providing two-way
cellular radio telecommunications service did not transmit "telephonic
messages" and thus could not be taxed as public utilities), with City
of Jefferson City v. Cingular Wireless, LLC, 531 F.3d 595 (8th Cir. 2008) (holding
that local tax ordinance imposing a tax on businesses supplying telephones and
telephonic service applied to a cell phone service provider), cert. denied,
129 S. Ct. 739 (2008), Airtouch
Commc'ns, Inc. v. Dep't of Revenue, 76 P.3d 342 (Wyo. 2003) (finding
that cellular service providers were telephone companies for the purposes of a property
assessment statute), Southwestern
Bell Mobile Sys., Inc. v. Arkansas Pub. Serv. Comm'n, 40 S.W.3d 838 (Ark. Ct. App. 2001) (finding that commercial mobile radio service
providers fell within terms of a property assessment statute that applied to "telephone
. . . or other similar companies"), City of Sunset Hills v.
Southwestern Bell Mobile Sys., Inc.,
14 S.W.3d 54 (Mo. Ct. App. 1999) (concluding that wireless communications
service provider was a telephone company and that City therefore had statutory authority
to impose a business license fee on it), and Cent. Ky. Cellular Tel.
Co. v. Commonwealth, 897 S.W.2d 601 (Ky. Ct. App. 1995) (holding that cellular
phone companies constituted telephone companies for the purposes of a property
tax statute).
Because we find
that further development of the facts is necessary to ascertain whether
Respondents constitute telephone companies for the purposes of section
12-20-100, we hold that the ALC erred by granting summary judgment on that
issue. Accordingly, we reverse the ALC's grant of summary judgment and remand
for further proceedings as to the applicability of section 12-20-100 to
Respondents.
II. ALC's Failure to Properly Rule
on Certain Issues
The Department also contends
that the ALC failed to give proper consideration to other issues raised by the
parties in their summary judgment motions. Specifically, the Department refers
to the following portion of the ALC's decision:
The
Alltel Entities further contend that DOR improperly calculated "gross
receipts from regulated business" in its computation of the § 12-20-100 license
fee due to the absence of a regulated business; that it improperly included the
assets and gross receipts from partnerships in the computation of the §
12-20-100 license fee because the corporate license fee applies only to
corporations; and, that it improperly asserted a substantial understatement
penalty against the Alltel Entities under § 12-54-155 (2000) because there is
substantial authority for the calculation of the license fee on the original
license fee returns. Because the Court finds that § 12-20-100 does not apply
to the Alltel Entities, it is unnecessary to reach these further assertions.
If the Court were to reach these issues, however, it would find for the Alltel
Entities on each of these issues for the reasons set forth above.
(footnotes omitted).
"An administrative body
must make findings which are sufficiently detailed to enable this Court to
determine whether the findings are supported by the evidence and whether the
law has been applied properly to those findings." Hamm v. S.C. Pub.
Serv. Comm'n, 309 S.C. 295, 300, 422 S.E.2d 118, 121 (1992). An appellate
court "will not accept an administrative agency's decision at face value
without requiring the agency to explain its reasoning." Kiawah Prop.
Owners Group v. Pub. Serv. Comm'n of S.C., 338 S.C. 92, 96, 525 S.E.2d 863,
865 (1999). When an administrative agency's order fails to set forth the basis
for its determination, the proper course of action is to remand the matter to
the administrative agency. Id. at 97, 525 S.E.2d at 865.
Here, it is questionable
whether the ALC actually ruled on the issues mentioned in the above-referenced
portion of its decision. The text of the decision states that "[i]f the Court were to reach these issues, . . . it would find for the Alltel
Entities on each of these issues for the reasons set forth above." (emphases
added). This statement indicates that it was not the ALC's intent to rule on
these issues.[8] Nonetheless, to the extent that the ALC did rule on any of these issues, we find
that the rulings were not sufficiently detailed to enable proper review.
Accordingly, we reverse the above-referenced portion of the ALC's decision and
remand the issues discussed therein to the ALC.
CONCLUSION
For the foregoing
reasons, the ALC's order granting summary judgment to Respondents is
REVERSED AND REMANDED.
PIEPER and GEATHERS, JJ.,
and CURETON, A.J., concur.